Yale Law School
Yale Law School Legal Scholarship Repository
Faculty Scholarship Series
Yale Law School Faculty Scholarship
1-1-1928
The Law of Third Party Beneficiaries in
Pennsylvania
Arthur Corbin
Yale Law School
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Corbin, Arthur, "The Law of Third Party Beneficiaries in Pennsylvania" (1928). Faculty Scholarship Series. Paper 2883.
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Pennsylvania
University of Pennsylvania
University
Review
Law Review
Register
And American
American Law Register
FOUNDED 1852
1852
FOUNDED
Pennsylvania Law School,
June, by the University of
Published Monthly,
Monthly. November
November to JUJlll,
of Peunsylvania
School,
at 34th lUId
Cheatnut Streetl,
and Chestnut
Streets, Philadelphi..
Philadelphia, Pa. .
VOL.
VOL. 77
NOVEMBER,
1928
NOVEMBER, I928
No. II
IN
THE LAW OF THIRD PARTY
PARTY BENEFICIARIES
BENEFICIARIES IN
PENNSYLVANIA
PENNSYLVANIA
ARTHUR
CORBIN
ARTHUR L.
L. CORBIN
"restate" the
The American
American Law Institute has undertaken to "restate"
common
common law of the United States. Mr. Justice Holmes, the
Nestor
Nestor of American legal
legal scholarship, has recently said that there
law.'1 He thinks that it is "an
"an unconstituunconstituis no such common law.
tional assumption of powers"
powers" for the courts of the United States
to attempt to establish such a common law in a state whose courts
have declared
declared a different law. His statement has much logical
1
"Books written about any branch of the common law treat it as
1 "Books written about any branch of the common law treat it as
from
from the Circuit Courts of Appeal, from
a unit, cite cases from this Court, fr.om
indiscriminately,
the State Courts, from England and the Colonies of England indiscriminately.
and criticize them
them as right or wrong according to the writer's notions of a
It is very hard to resist the impression that there is one
single theory. It
understand which
which dearly
clearly is the only task of any Court conconaugust corpus, to understand
transcendental body of law outside of any
cerned. If
If there were such a transcendental
particular
changed by statute,
particular State but obligatory
obligatory within
within it unless and until changed
independent
the Courts of the United States might be right in using their independent
judgment
judgment as to what it was. But there is no such body of law. The fallacy
consist in supposing that there is this outside
and illusion that I think exist consist
thing to be found. Law is a word used with different
different meanings, but law in the
which courts speak of it today does not exist without some definite
sense in which
authority
authority behind it. The common law so far as it is enforced in a State,
generally but the
common law generally
whether called
called common law or not, is not the common
law of that State existing by the authority of that State without regard to
what it may have been in England or. anywhere else." Mr. Justice Holmes in
& T. Co., 48 Sup. Ct.
Black &
& T. Co. v. Brown and Yellow
& White
White Taxi &
Yellow Taxi &
404 (I~8).
(1928).
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PENNSYLVANIA LAW
and practical
"unconstitutional assumppractical force. There
There is no such "unconstitutional
assumption of powers,"
powers," however, on the part of the American
American Law Instipower
tute. The reason for this is that it assumes to have no power
whatever, except the power that is derived from influence on the
minds of men. Its work represents an effort
effort on the part of men
throughout
throughout the entire country to create a common law in place of
variation and conflict. No doubt the effort has presented
presented itself
itself
to many minds as merely
merely an attempt to state an already existing
existing
universal
universal system of rules. This may indeed explain
explain why it has
been dubbed a "Restatement." But even though we must admit
that these United States possess no august corpus
corptts juris,
j1tris, it seems
accompanied also by a
certain that the fallacy of its existence is accompanied
strong general
existence. No doubt, with our presgeneral desire for its existence.
ent political organization
of
attain the object of
organization it is impossible to attain
this desire. It
It is not impossible, however, for the American Law
bar
Institute, if supported by the sentiment of the bench and bar
throughout the country, to make very substantial progress toward
clarifying certhe establishment
establishment of a common
common law, especially by clarifying
tain portions
portions of the law that are now most confused and productive of unnecessary
unnecessary litigation, and by definitely choosing one rule
out of a number of competing
competing rules in cases where there is now
conflict
conflict of decisions.
One such field of law in which the Institute has attempted
attempted a
clarification
found in Chapter 6 of
clarification and has made a choice is to be f<?und
the proposed Restatement
Restatement of the Law of Contracts,
Contracts,entitled "Con"Contractual
Contract." For
tractual Rights of Persons not Parties
Parties to the Contract."
several
conflicting
several centuries, at least, there have
have been two directly
directly conflicting
doctrines: one, that a contract made by two parties
parties. for the benefit
benefit
of a third may create enforceable
enforceable rights in that third person; the
"privity of contract"
contract" has no enforceable
other, that one not in "privity
conflicting doctrines have kept the minds of lawright. These
These conflicting
led
..yers
yers and judges
judges confused and uncertain
uncertain and have therefore
therefore led
to an immense amount of wholly unnecessary
unnecessary litigation. They
have led, also, to a considerable
considerable amount of direct conflict in
in
of the cases will show that, so
decision, although a close study of
far as actual decisions go, the courts have succeeded
succeeded remarkably
in reaching consistent results that accord with the sense of justice
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PARTY BENEFICIARIES
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THIRD PARTY
PENNSYLVANIA
3
of the community. The result that they have reached
reached involves
the total abandonment
doctrines;
abandonment of the second of the conflicting doctrines;
"restated" by the American Law Institute
and this result has been "restated"
referred to above. "Privity
"Privity of contract"
not
in Chapter 6 referred
contract" is not
required for the creation
creation of a contractual
contractual right. If this is the
result that has actually
actually been attained by the decisions, it is time
to abandon the repetition
misleading doctrine. It is time
repetition of the misleading
to quit explaining
explaining decisions as being
being based upon exceptions where
they are in fact in accordance
accordance with a generally prevailing
prevailing rule.
statements are more thorThere is no state in which these statements
oughly applicable than in Pennsylvania. Not only are both of
the conflicting
conflicting doctrines continually
continually repeated as if they were both
correct, but there are opposing lines of decisions not capable
capable of
of
any reasonable
reconciliation.
In
case
the
court
chooses
to
adopt
reasonable reconciliation.
chooses
conflicting doctrines
other, it has at
one of the conflicting
doctrines rather than the other.
times cited the one line of authority without any reference
reference to the
other. This situation
situation exists even at the present time, although
in a few of the more recent cases the problem
problem has been
been attacked
attacked
with much vigor and intelligence. The authorities are in such a
condition that the Supreme Court of Pennsylvania
without
Pennsylvania can without
difficulty lend its support to the effort of the American Law Institute. By so doing, not only would the court assist greatly in the
effort to create
create a common law of the United States; but it would
also clarify
clarify the law of Pennsylvania itself and enable lawyers
lawyers to
case all the way to the
advise their clients without taking every ca5e
Supreme Court.
There
There are a few other jurisdictions in which the courts have
been slower than the courts of Pennsylvania
Pennsylvania to give effect to the
doctrines accepted
accepted by the Law Institute. For. example.
example, it has
been supposed
supposed· that England, Massachusetts,
Massachusetts, Connecticut, Michigan, and the federal courts have persisted in requiring "privity
"privity
contract." In these jurisdictions there have probably been
of contract."
been
more approving repetitions of this doctrine than in other states.
It is not certain, however, that their actual decisions
decisions are so very
very
different. No doubt lawyers have been to some extent
extent discouraged from bringing suits on behalf of third party beneficiaries,
although the number of such cases brought and the number of
of
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4
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UNIVERSITY OF
OF PENNSYLVANIA
UNIVERSITY
PENNSYLVANIA LAW
one who makes a
such cases won by the plaintiff
plaintiff will surprise any
anyone
study of the law of those jurisdictions. The present writer has
Connecticut; 2 and the Supreme
previously reviewed the law of Connecticut;2
case put the law of the state in
Court of that state has in a recent case
substantial harmony
harmony with that prevailing elsewhere
elsewhere as stated by
by
investigations in
the Law Institute.33 The result of the writer's investigations
in
exceptional jurisdictions
jurisdictions may be briefly
the law of these other exceptional
stated. In practically
practically all the states not here specially mentioned,
mentioned,
agreement with the American
the courts are in substantial agreement
American Law
Institute.
been
The conflict
conflict in the English law was supposed to have been
4
4
Atkinson. It
It may be
settled by the striking case of Tweddle v.
v. Atkinson.
dogmatically asserted that this is not true. The facts in that case
were such as to make the decision
decision shocking to anyone who is not
not
a worshipper
worshipper of mere legalistic
legalistic logic and who believes that it is
the function of the courts
courts to create and administer the law on the
basis of existing social mores. The courts of England, while
appearing at times to worship at the shrine of legalistic
legalistic logic,
considerable degree to
have, nevertheless, been
been able in a very considerable
reach results in direct conflict
conflict with the decision in Tweddle v.
concept
Atkinson. They have done this chiefly
chiefly by expanding
expanding the concept
by
two
parties
has
been
made
Where
a
contract
of a "trust."
"trust." \iVhere
made
parties
for the benefit of a third, they have declared that the promisee is
a "trustee"
enforced
"trustee" for the third person, and have recognized and enforced
a right in the third person against the promisor. They adopted
this method
method because
because the tradition of the law required no "privity"
beneficiary could be described
in cases
cases where
where a beneficiary
described as a "cestui que
trust." By putting the case within the field of trust law they
(1922)
Benefit of
of Third
Third Persons
the Bmefit
Corbin, Contracts
•2 Corbin,
Contracts for
for the
Persons in
in Connecticut
Connecticut (1922)
J. 489.
31 YALE L. ].
3Baurer v. Devenis, 99 Conn. 203, 121 Atl. 566 (1923).
For full
• Baurer v. Devenis, 99 Conn. 203,121 Atl. 566 (1923). For
full clarificaclarification, it will still be necessary
necessary for the court
court to abandon the theory that the rights
"in equity"; but this is a matter of terbeneficiaries are "in
of numerous
numerous creditor beneficiaries
substantive law.
minology and not of substantive
B. &
& S.
393 (r86I).
(1861). The
The fathers
fathers of
of aa bride
•' I1 B.
S. 393
bride and
and groom
groom contracted with
to
named amounts to the young bridegroom to
each other that they would pay named
help the couple start in life; and they specifically provided that he should have
a legally
enforceable right. Yet the court held that the bridegroom
bridegroom could not
legally enforceable
executor of one of the promisors.
maintain assumpsit against
promisors. Contra:
C01Jtra:
against the executor
(1677); Oldham v. Bateman, Rolle Abr. 31,
Dutton v. Poole, 2 Lev. 210
2IO (1677);
31, pl.
pi. 8
1630).
Hetley
30
(about
Provender
v.
Wood,
(1637);
(1637);
Hetley
(about 1630).
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55
contract benefidary
beneficiary without appearing
appearing
could enforce
enforce the right of a contract
to deny the frequently approved
approved doctrine that contract beneficibeneficiaries have no rights. In these cases the beneficiary's
beneficiary's right was
enforced by a bill in equity brought in his own name;5
name ;5 and it
it
enforced
enforced in a common la~
law action, provided it was
could be enforced
brought in the name of the promisee
promisee for the use and benefit of the
6
6
reason
third party. Since the Judicature
Judicature Act there is no good reason
for refusing to let the beneficiary
beneficiary bring an action in his own
name.77 If, prior to that act, the Court of Chancery
Chancery recognized
recognized
and enforced a right in the beneficiary,
it
is
incumbent
upon the
beneficiary,
High Court of Justice
Justice to do exactly what the Court of Chancery
formerly did. This has actually been done by the House of
of
Lords in the last case of this sort that came before it.88 Since the
decision in the
decision is, in fact, inconsistent with an earlier decisi~:m
explained with the usual amount
same House, it may perhaps be explained
amount
of specious distinctions. The earlier case was not cited by the
learned Lords or even indirectly
indirectly referred
referred to.
The law of Massachusetts has been reviewed in recent treatises on the law of contracts.99 There is an increasing number of
recent
recent decisions in which the court gave judgment
judgment to the plaintiff,
although
"privity of contract"
although he was clearly not in "privity
contract" with the
rTomlinson v. Gill, Ambler 330 (1756);
(756); Gregory v.
v. Williams,
Merivale
GTomlinson
Williams, 3 Merivale
582
& Sm. 517 (1851);
(1851); Touche v. Metrop.
58z (1817)
(1817);; Moore v. Darton, 4 DeG. &
Ry. W. Co., L. R
R. 6 Ch. App. 671 (1871);
(1871) ; Mulholland v. Merriam, ig
19 Grant Ch.
1872) (an
(an enlightening case).
case). The beneficiary joined as plaintiff
288 (Ont. 1872)
with the promisee and got a decree for specific performance in Peel
Peel v. Peel,
P. 586 (1869),
(1869), and Hohier
[i92o] 2 Ch. 420.
17 W. R
Hohler v. Aston, [1920]
In Faulkner v. Faulkner, 23 Ont.
R. 252 (1893),
(1893), the court said definitely
Onto R
definitely
that there was no "trust"; but it decreed
decreed payment to the beneficiary.
beneficiary suffers, not by those
•" The damages are measured by what the beneficiary
& W. 467 (1840);
(i84o); Robertson
of the promisee. Lamb v. Vice, 6 M. &
Robertson v. Wait,
0853).
88 Ex.
Ex. 299 (1853).
'Lloyd's v. Harper, 16 Ch.
(i88o); In re
re Flavell, 25 Ch. D. 89
89
7Lloyd's
Ch. D. 290 (1880);
(1883);
R. 176.
(1883) ; Drimmie v. Davies, [1899] Ii Ir. R
'Les Affreteurs
Affr~teurs v. Walford, [1919]
[igig] A. C. 801,
8oi, approving
sLes
approving Robertson
Robertson v.
A shipping
Wait, 8 Ex. 299 (1853).
(1853). A
shipping agent
agent was given judgment
judgment for his
commission against a charterer who had contracted
contracted in writing with the shipship"trustee" for his
owner to pay the commission. The promisee was called a "trustee"
v. Selfridge
agent, the plaintiff. The inconsistent
inconsistent case of Dunlop Tyre Co. v.
expedient
"trustee" exp~ient
& Co., [1915]
[i915] A. C. 847, was not mentioned. Apparently
&
Apparently the "truste~"
oversight
was not thought of by the lawyers for the Tyre Company. Their
Their oversight
ought not have been fatal.
0
CONTRACTS (Corbin's
1924) § 299;
299; WILLISTON,
W=USTON, CONTRACTS
CONTRAcTS
• ANsoN,
ANSON, CONTRACIS
(Corbin's ed. 1924)
(1920) §§ 367.
367.
(1920)
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defendant. 110-Q The earlier Massachusetts
Massachusetts law was definitely in
m
and
recent
Restatement of the Law Institute;
harmony with the Restatement
Institute;
recent
Massachusetts decisions can easily be regarded as having brought
Massachusetts
brought
the modern law of the state a good distance in the same direction.
The Supreme Court of Michigan
Michigan seemed to be consistently
consistently
following the doctrine that third party
party beneficiaries
beneficiaries had no enin
forceable rights. It was even said that such was the case in
equity as well as at law. The court decided
decided in accordance
accordance therewith in some cases that are as shocking to the conscience
conscience as was
the decision in Tweddle v. Atkinson."'
AtkinsonY Finally, however, a case
came before it in which the judges
judges could not endure the thought
thought
of maintaining logic at the expense of justice to the plaintiff.
her
Where a wife conveyed a dower interest in land in return for her
husband's promise to give certain property
property and support to their
their
blind and incapable daughter, the court sustained an action by
this daughter after the mother's
mother's death. Having first rested the
decision on a statutory provision
provision that was merely procedural
procedural in
in
decision
its effect, the court
court on rehearing chose instead to rest the decision
upon the fact that the blind girl was present when the parents
parents
were contracting and heard her father's promise. This, said the
court, created sufficient "privity"
"privity" to satisfy the
t~e requirements
requirements of
12
requirement of "privity"
"privity" can be
their general
general doctrine. 12
If the requirement
be
20 McNamara v. McGuire, 254 Mass. 584,
i5o
862 (1926)
(state con10 McNamara v. McGuire, 254 Mass. 589,
ISO N.
N. E.
E.862
(1926) (state
construction bond for benefit of laborers and materialmen, statutory); Goulding
Goulding
(building
restriction
covenant
125
N.
E.
703
(1920)
v. Phinney, 234 Mass.
Mass. 411,
4II, 125
E.703 (1920) (building
covenant
492, 105
105 N. E.
for benefit of other lot owners)
owners) ; Gardner
Gardner v. Denison, 217 Mass. 492,
212
beneficiary); Collins
(194) (an extreme case of donee beneficiary);
359 (1914)
Collins v. Collins, 212
heir
(1912) (specific
(specific performance
131, 98
gB N. E. 588 (1912)
performance decreed in favor of an heir
Mass. 131,
of the promisee);
promisee); Forbes v. Thorpe, 209
209 Mass. 57o,
570, 95 N. E.
E. 955 (1911)
(19II)
beneficiary) ; Phinney v. Boston El. Ry.,
("asset" theory
("asset"
theory in favor of a creditor beneficiary)
(9o9) (promise
(promise to a city to keep pavements in
201 Mass. 286, 87 N. E. 490 (1909)
i98, 44 N. E.
E. 216 (1896)
66 Mass. 19B,
repair); Grime v. Borden, 166
(18g6) (promisee
(promisee a
i89, 44 N. E. 211
"trustee") ; Palmer
"trustee");
Palmer Say. Bank v. Insurance
Insurance Co., 166 Mass. 189,
2II
159 Mass.
(1896) (fire
(fire insurance policy payable
(1896)
payable to mortgagee)
mortgagee) ; Nims v. Ford, 159
Paper
575,
E. 1000oo(1893)
575, 35 N. E.
(1893) (life insurance beneficiary,
beneficiary, based
based on statute) ; Paper
(1888) (fiction
(fiction that
that
Stock D. Co. v. Boston D. Co., 147 Mass. 318, 17 N. E. 554 (1888)
I3I Mass. 31 (188i)
promisee) ; Fay v. Guynon, 131
plaintiff
plaintiff was a promisee)
(1881) (a donee benebeneficiary sued in the name of the promisee
promisee against the latter's will and got subsubv. Adams, 96
none);; Adams v.
stantial damages
damages although the promisee suffered none)
(1867) (devise
(devise on condition).
condition). See also N. Y. Central Ry. v. Central
Mass. 65 (1867)
In no modern
modern case, however,
56, 136 N. E.
(1922).
Vt. Ry., 243 Mass. 56,
E. 825 (1922).
In
requirement of "privity"
"privity" been denied.
has the general requirement
.a
See Linneman
Linneman v. Moross, 98
gB Mich. 178, 57 N. W.
(1893) ;; Knights of
of
W. 103 (1893)
'See
(igio).
Maccabees v. Sharp, 163 Mich. 449, 128 N. W. 786 (1910).
207 Mich.
Mich. 68i,
172 N.
N. W.
371 (1919),
(1919), 20]
1"
Preston v.
205 Mich.
12 Preston
v. Preston,
Preston, 205
Mich. 646,
646, 172
W. 371
681,
(1919).
175
175 N. W. 266 (1919).
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BENEFICIARIES IN
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7
satisfied
satisfied as easily as this, the next step should surely be to abandon
the ridiculous requirement. The Michigan court has, in a still
beneficiary of a contract
more recent case, decided
decided in favor of aa beneficiary
contract
between
between two mutual subscribers to a fund, even though the facts
were not such as to make heartstrings
heartstrings vibrate.1I3l
With respect to the federal courts it must now be said that
·With
14 Here,
they are applying the law of the respective
respective states. 14
at
least, the views of Mr. Justice Holmes referred to above are
United States
amply sustained. In the Supreme Court of the United
suit
well
as
at
law,
welt as a suit
itself, there are cases in which an action
in equity, has been sustained in favor of the third party
party beneficiary."5 The cases in the circuit court of appeals and in the
ficiary.15
extremely numerous; and in nearly all of
of
district courts are now extremely
6
16
Some of these
them judgment
judgment was given for the plaintiff.'
plaintiff.
13
Masonic Assn. v. Colman's Estate, 222 Mich.
Mich. 599, 193 N.
N. W. 219
" Oark
Clark Masonic
85o (1904);
(1904) ;
'(1923). See also Palmer
Palmer v. Bray, 136 Mich. 85, 88, 98 N.
N. W. 849, 850
"(1923).
132, 24 N.
Nay. Co. v. Thames, etc., Ins. Co., 58
0. Nav.
Richelieu & O.
58 Mich. 132,24
N. W. 547
(1915) § 12680, giving a right to mortgagees.
LAWs (1915)
MIcH. ComP.
(1885) ; and MICH.
(1885)
COMPo LAWS
mortgagees.
(C. C. A.
Co. V.
v. Minneapolis
"Federal
1< Federal Sur. CO.
Minneapolis S. &
& M. Co., 17 F.(2d)
F.(2d) 242
242 (c.
Minne8th, 1927)
Montana law against the plaintiff while sitting in Minne(applied Montana
1927) (applied
F.(2d) 223 (C.
Co. v.
sota); Duvall-Percival
V. Jenkins,
Jenkins, 16 F.(2d)
(c. C. A. 8th,
Duvall-Percival Trust CO.
sota);
1926)
Missouri law
law in favor of the plaintiff
plaintiff while sitting in Kansas,
(applied Missouri
1926) (applied
plaintiff).
the Kansas law being against the plaintiff).
v. HanCo. V.
(1876) ; Union Life
v. Lindsay, 93 U. S. 143 (1876);
'Hendrick
l:i
Hendrick V.
Life Ins. CO.
(mortgagee sued at law on an asford, 143 U. S. 187, 12 Sup. Ct.
(1892) (mortgagee
Ct 437 (1892)
sumption of the mortgage debt by the defendant, and the court applied Illinois
18o U. S. 440,
law)
V. Wilson, 180
440, 21
21 Sup.
Sup. Ct. 445 (Igo1)
(1901) (Arizona law)
law) ;
law);; Johns v.
(192) (beneficiary
Hagan V.
186 U. S.
S. 423, 22 Sup. Ct. 862
862 (1902)
(beneficiary
v. Scottish Ins. Co., 186
Hagan
concern joined
joined with
with
of marine insurance policy issued to X "for whom it may concern"
judgment).
X and got judgment).
liberal application to the Act of Aug.
A long line of cases gives the most liberal
13, 1894
1894 as amended,
amended, 28 STAT.
STAT. 278 (1894),
(1894), 33 STAT. 811
8n (1905),
(1905), 36 STAT. 1167
n67
(1926), in favor of laborers
(19n),
S. C. §§270
laborers and materialmen on pub270 (1926),
(1911), 40 U. S.
25o0
Co., 246 U. S. 257, 38 Sup. Ct. 25
Natl. Sur. Co"
V. Nat!.
lic contracts. See Brogan v.
CO. v.
V. Peeler, 240 U. S.
S. 214,
214, 36 Sup. Ct. 321
321 (i9i6).
(1916 ).
(1918);
(1918); Illinois Sur. Co.
IO Sup. Ct. 494 (I89O),
6io, 10
In Keller v.
V. Ashford, 133 U. S. 610,
(1890), a mortgagee
mortgagee
decree on the theory of
of subrogation. The dicta as to remedies
remedies
beneficiary got a decree
beneficiary
"at law" are of the older sort. The statements
statements in National
National Bank v.
V. Grand
Lodge, 98 U. S. 123
123 (1878),
longer molding
molding
(I878), half-dictum as they are, are no longer
the law.
:Ill
The following
following are selected out of a long list of cases
cases in which the
"The
Circuit Courts of Appeal
Appeal or District Courts held in favor of the beneficiary:
beneficiary:
Circuit
1927) (at law
(C. C. A. 6th, 1927)
81o (c.
ig F.(2d)
Dunn V.
F.(2d) 810
law for a
v. Clinchfield Ry., 19
27)
1927)
ig F.(2d)
v. Bonnasse, 19
tort);
Francaise V.
F.(2d) 777 (C.
(c. C. A. 2d, 19
tort) ; Compagnie Francaise
1927)
(C. C. A. 5th, 1927)
F.(2d) 87 (c.
(in admiralty)
admiralty);; First N. Bank v. Caples, 17 F.(2d)
(at law on a surety bond)
bond) ; Collins Mfg. Co. v. Wickwire Steel Co., 14 F.(2d)
(at
871 (D.
(D. C. Mass.,
Mass., 1927)
theory) ; Smith & Co.
CO. v.
V. Wil(in equity, on an "asset" theory);
I927) (in
v. Federal B.
I925) ; Mobile S. Co. V.
son, 99 F.(2d)
F.(2d) 51 (C.
B. &
& S. Co.,
Co.,
(C. C. A. 8th, 1925);
v. Buford, 262
law) ; Gooch V.
280
(C. C. A. 7th, 1922)
1922) (at law);
262 Fed. 894
292 (C.
28o Fed. 292
(c.
(donee beneficiary, at law); Dancel
Dancel v. Goodyear Shoe
Shoe
1920) (donee
(C. C. A. 6th, 1920)
equity).
19o6) (in equity).
(C. C. A. 2d, 1906)
Mach. Co., 144 Fed. 679 (C.
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8
UNIVERSITY
PENNSYLVANIA LAW
REVIEW
UNIVERSITY OF PENNSYLVANIA
LAW REVIEW
cases were on the equity side of the court; but many others
others were
not. The federal courts now purport to apply the law of the
state which governs
governs the rights of the parties, both with respect to
to
the
the substantive law and with respect to the question whether
whether the
"legal" or "equitable."
"equitable." There are a few cases that cannot
cannot
right is "legal"
be reconciled
reconciled with the majority; and, of course, there are innumerable
inconsistent dicta and statements
merable inconsistent
statements of general legal doctrine. Generally, these merely
merely reflect the conflict
conflict or inconsistency
inconsistency
existing
existing in the law of the states that are involved.
PENNSYLVANIA
PENNSYLVANIA LAW
At first, just as was the case in England, Massachusetts and
elsewhere, it was recognized
recognized that two persons
contract
persons could by contract
create
create rights in a third. The rule was laid down and has been
continually
continually repeated
repeated that he for whose
whose benefit a promise is made
may maintain
an
action
upon
it
although
maintain
although the promise was not
1
7
made directly to him and no consideration
consideration was given by him.
him.l1
Very soon,,
soon,. however, distinctions began to be drawn. The leading case, one that is cited
cited more often than any other, is Blymire v.
Boistle, decided in 1837. In this case a debtor
debtor sold certain land
Boistle,
to
to the defendant, receiving in return the defendant's promise to
pay the price to the promisee's creditor in satisfaction of the
promisee's
promisee's debt to such creditor. In a suit by the creditor
creditor on
this promise the court gave judgment
for
the
saying
defendant,
defendant. saying
judgment
that the contract
contract was made
made for the benefit of the promisee
promisee and not
not
for the benefit of the plaintiff.
plaintiff.'Is This is in direct
direct conflict with
""The right of the plaintiff to recover does not depend upon privity of
11 "The right of the plaintiff to recover does not depend upon privity of
contract 'It is a rudimental
contract
rudimental principle, that a party may sue on a promise
promise made
made
on sufficient consideration
consideration for his use and benefit, though it be made to another
(x879), quoting
quoting
other and not to himself."'
himself.''' Merriman v. Moore, 90 Pa. 78 (1879),
.from Hoff's App., 24 Pa. 200,
2oo, 2o5
(1855).
205 (1855).
"'"Where
18
"Where one person contracts
contracts with another to pay money to a third, or
or
to deliver over some valuable
valuable thing, and such third person is thus the only
only
party in interest, he ought to possess
or
possess the right to release the demand, or
recover it by action. But when a debt already exists from one person to
recover
another, a promise by a third person to pay such debt, being for the benefit
benefit
of the original debtor, and to relieve him from the payment
payment of it, he ought
ought
to have a right of action against the promisor for his own indemnity;
indemnity; and
if the promisor were also liable to the original creditor, he would be subject
time, for the same debt, which would be
to two separate actions
actions at the same time,
inconvenient, and might lead
injustice." Blymire
lead to injustice."
Blymire v. Boistle, 6 Watts 182, 184
(Pa. 1837).
1837). See also Cummings v. Clapp,s
Clapp, 5 W. &
& S.
S. 51I
5II (Pa. 1843).
1843).
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IN PENNSYLVANIA
THIRD PARTY
BENEFICIARIES IN
PARTY BENEFICIARIES
PENNSYLVANIA
9
Fox,""
Lawrence v. Fox,
the leading New York case of Lawrence
19 decided some
consistently followed, no
twenty years later; and if it had been consistently
a
directly
have
would
beneficiary
creditor
creditor beneficiary
directly enforceable
enforceable right on a
promise to his debtor to pay the debt. However, it has not been
consistently
consistently followed, although it has never been formally disapproved; and it has been cited with apparent approval
approval in Penn20
The reason for
sylvania more often than any other single case. 20
recognized the general rule that a
this is that the court expressly recognized
contract is made can enforce the
third party for whose benefit a contract
contract. The case can therefore
therefore be plausibly cited as authority
authority
in any other case in which the court is willing to hold that the
contract in question was made for the benefit of the plaintiff,
even though the facts of the case in question are substantially parBlyrnire v. Boistle and the decision being renallel to the facts in Blymire
dered
dered is substantially
substantially in conflict with that decision.
The decisions and the reasoning of the courts have been so
150 years that no uniform doctrine can be made
variable during 150
from them; but the tendency is clearly towards a recognition
of
recognition of
of
a
In
spite
and
creditors.
donees
enforceable rights in both
creditors.
_he tendency
few modem cases, the
tendency is clearly away from the decision
decision
Boistle. The decision in that case should be recogin Blymire v. Boistle.
nized as being in direct conflict with a great many later cases
cases and
2211
it should now be flatly and expressly disapproved.
disapproved.
throughout the
cases throughout
thousand cases
in aa thousand
now followed
followed in
(i859), now
is2o N.
:!lim
N. Y.
Y. 268
268 (1859),
the
country.
Ch. v. Isenberg,
m
Isenberg, 246 Pa. 221, 225, 92 AUt.
At!.
z The statement in First M. E. Ch.
142 (1914),
(914), that the rule of Blymire v. Boistle
141,
BoistIe has been "followed
"followed without
41, 142
cannot be sustained as
deviation for more
more than three-quarters
three-quarters of a century" cannot
true except by making factual
factual distinctions so confused and unsubstantial
unsubstantial as to
bring law into general
general disrepute. It
It is hiding one's head in the sand so as
Similar misleading statements
statements are made
to be able to say, "I see no conflict."
conflict" Similar
(1896).
1O36 (18g6).
AtI. 1034,
1034, 1036
in Freeman v. Penna. R. R., 173 Pa. 274, 279, 33 AUt.
The clearest
clearest recognition of the state of the law is found in Brill v.
(1925), an excellent decision
decision that should
should
Brill, 282 Pa. 276, 127 At!.
At. 840 (1925),
increasingly
increasingly tend to clarify and modernize the Pennsylvania law.
383. (i85), "it was held
38o, 383.(1851),
"'The
Finney v. Finney, 16 Pa. 380,
" The court said in Finney
that Boistie
Boistle could not recover for want of privity. Yet in precisely such a
statement
otherwise.' If this was a true statement
case chancery
chancery would have decreed othenvise."
case
beneficiary should lose his case
case in Pennsylvania
Pennsylvania now.
in 1851,
1851, no true contract beneficiary
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Io
10
UNIVERSITY
OF PENNSYLVANIA
PENNSYLVANIA LAW
UNIVERSITY OF
LAW REVIEW
REVIEW
BENEFICIARIES CLASSIFIED; DONEES
BENEFICIARIES
The courts of the entire
entire country
country usually say, as was said in
Blyndre v.
v. Boistle, that if a contract is made for the benefit
Bly11lire
benefit of a
third person he has an enforceable
enforceable right against
against the promisor.
Doubt and conflict have grown out of the phrase "made
"made for the
Blyntire v.
v. Boistle did not deny the
benefit of."
of." The court in Blymire
rule; instead it definitely asserted that the plaintiff need not be a
promisee. But it
jt was unable
unable to see that the contract
contract in question
question
was made for the plaintiff's benefit. He was a creditor of the
promisee; and the latter
latter no doubt purchased the promise of the
debt
defendant in order to bring about the discharge
discharge of his own debt
by a performance
performance by the promisor. This question of a supposed
supposed
intention to benefit the third person must be considered.
conveniently thrown into
The cases within this field can be conveniently
two classes. Cases not falling within them are complex
complex and rare
ran:
and will not be considered
considered here. Third parties are classified as
donee beneficiaries
beneficiaries and creditor beneficiaries.
beneficiaries. If the performance
promised
promised by the defendant
defendant will, when rendered, come to the third
If, on the
person as a pure donation, he is a donee beneficiary.
beneficiary. If,
him in satisfaction of
performance will come to hi~
other hand, that performance
of
is
a
creditor
benea legal duty owed to him by the promisee, he
creditor
ficiary. In the donee cases the plaintiff has little difficulty in
convincing
convincing the court that the promisee, in purchasing
purchasing the promise
of the defendant, had the purpose
purpose in his mind of conferring
conferring a
whom
the
performance
upon
the
third
person
to
benefit
benefit
performance was to go
as a donation. Of course, purpose
purpose and intention can be proved
proved
only by the evidence of external manifestation;
manifestation; but in these cases
cases
that manifestation
manifestation is thoroughly convincing.
convin.cing. A decision in favor
of a donee beneficiary, therefore, is merely
merely an application of the
express
express dictum of Blymire v. Boistle,
Boistle, as frequently
frequently repeated in
other cases. The supreme
supreme court has recognized a right in the
22 so that the dictum should
plaintiff in several cases of this sort; 22
well-established law of the state.
be regarded as the well-established
seinbte: Hostetter v. Hollin""'Blymire
Blymire v. Boistle,
Boist!e, 6 Watts 182 (Pa. 1837)
1837) semble:
6o6, 12 AtI.
(1888) semble; Edmundson's Est., 259 Pa. 429,
ger, II7
117 Fa.
Pa. 606,
At!. 741 (1888)
(918) (conveyance
(conveyance of land for defendant's
lO3 At.
103
At!. 277 (1918)
defendant's promise to pay money
money
(1925)
daughter) ; Brill v. Brill, 282 Pa. 276, 127 AUt.
to the promisee's daughter);
At!. 84o
840 (1925)
(the
(the promisee was under a legal duty
duty to the plaintiff, but the case easily supports
HeinOnline -- 77 U. Pa. L. Rev. 10 1928-1929
PENNSYLVANIA
PARTY BENEFICIARIES
BENEFICIARIES IN
THIRD PARTY
IN PENNSYLVANIA
IIiI
CREDITOR BENEFICIARIES
CREDITOR
BENEFICIARIES
What is the purpose
purpose of the promisee when he purchases a
promise of the defendant to pay a debt owed by the promisee to
the plaintiff? Clearly, it is not to make a donation of the payment, since such payment is to come in satisfaction
satisfaction of a debt;
debt;
the third person will receive it at the cost of his claim against the
of" means made with the
If "made
promisee. If
"made for the benefit of"
conferring a gift upon somebody,
purpose of conferring
somebody, the contract
contract is not
not
been
made for the creditor's benefit. But the phrase has not been
given a single dictionary
dictionary definition. The cases following Lawrence v. Fox
Fox (a creditor
creditor case),
case), many of them in Pennsylvania as
well as elsewhere, require us to give a meaning
mep.ning to the phrase other
other
certainly
than that of intention
intention to make
make a gift. The promisee certainly
looks forward to the creditor's getting the money promised
promised by
the defendant. His ultimate motive and object of desire are no
he
doubt benefit to himself. He wants freedom from debt. But he
also desires the means by which this is to be brought
brought about, and
and
to
therefore
therefore contracts for it to take place. Without intending to
make a gift to anyone, he desires and intends to induce the pay(1925)
the rule in the text above)
above) ; Tasin v. Bastress, 284 Pa. 47, i3o
130 AtI.
At!. 417 (1925)
C's debt to D) ;;
A made to B to pay C's
C on a promise by A
(judgment in favor of C
(judgment
(19o9); Noren
Hoffa v. Hoffa,
Hoffa, 38 Pa. Super. 356 (1909);
Noren v. Star E.
E. & S. Co., 34 Pa.
345,
C. C.
236 (1907).
(1907). See also McBride v. Western Pa. Paper Co., 263 Pa. 345.
C.236
io6 Atl.
AUt. 720 (1919)
106
(1919) (the
(the third party was present when the promise was made);
made) ;
and
and Depuy v. Loomis, 74 Pa. Super. 497 (1920).
(1920).
ioi (1910),
(I9IO), is contra,
cOlltra., but the court doubted
Mallalieu's Est., 42 Pa. Super. 101
that any contract
contract was made. Blymire v. Boistle
Boistle is cited as if it were in accord,
general rule stated in that case is squarely
squarely against the decieven though the general
sion being rendered.
In a very recent case some of these cases were reviewed;
reviewed; and they were
said to establish various classes of new "exceptions."
"exceptions." Greene County
County v. South292 Pa. 304, 141 Atl. 27 (1927).
ern Sur. Co., 292
(1927). But in donee
donee beneficiary
beneficiary cases
nmke the rule, and there are
the exceptions
exceptions do not merely prove the rule; they make
no decisions against it. The time has arrived
arrived to say so; and, indeed, in so doing
express dictum of Blyhonored express
the court will merely have to repeat the long honored
v. Boistle. The court, in the Greene County case, very sensibly
mire v.
sensibly said at
beneficiary,
313, 141 At].
Atl. at 31: "Whatever
"Whatever the objections to recovery by the sole
sole beneficiary,
cause."
they are insufficient
undoubted merit and justice
justice of his cause."
insufficient to overcome the undoubted
Of course.
can
beneficiary of a life insurance policy can
course, no one doubts that the beneficiary
maintain action thereon.
'
(x877), the third parties
In Guthrie v. Kerr, 85 Pa. 303
303 (1877),
parties had no rights
as donee beneficiaries, because
because the defendant
defendant had made no promise to pay them
although
although he had the option of performing his contract
contract by paying them.
beneficiary of an insurance policy, having an enforceable
The donee beneficiary
enforceable right
right
reinsurance company's
beneficiary of a reinsurance
creditor beneficiary
against the insurer, becomes a creditor
promise
promise to the original insurer. See Jones v. Com. Casualty Co., 255 Pa. 566,
ioo At].
100
Atl. 450 (1917).
(1917).
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12
UNIVERSITY OF
LAW REVIEW
UNIVERSITY
OF PENNSYLVANIA
PENNSYLVANIA LAW
REVIEW
ment by the defendant
defendant into the hands of the creditor. Although
not a gift, this performance
performance is beneficial to the creditor in that it
it
puts a bird in his hands in the place of one in the bush. So therefore, the purposes of the promisee are being carried out by the
courts when they give judgment
prom-,'1
judgment to the creditor against the promisor and enforce
of
enforce it by execution in his behalf. Satisfaction
Satisfaction of
this judgment
judgment puts the bird in the hands of the creditor and discharges
charges the promisee's
promisee's debt to him. These are the intermediate
intermediate
and ultimate objects of desire by the promisee; and he is attaining
attaining
them both without trouble or expense to himself. No one doubts
that it is the duty of the promisor to the promisee to perform
perform as
he promised and thereby
thereby to exonerate
exonerate the promisee from his debt
debt
creditor
to the creditor. Collection from the promisor by the creditor
brings about this exoneration. It brings it about by means of
one suit when otherwise
necessary; it cutb
cuts
otherwise two suits might be necessary;
along the hypothenuse of the triangle. The creditor may, of
course, compel the promisee to pay the debt himself; but it is
most unjust on the part of the promisor to allow this to occur.
Having paid the promisor
promisor once for the payment of the debt, the
promisee should not be forced to raise funds a second time to
discharge
extreme case, of bankruptcy
discharge it, at the expense, in an extreme
bankruptcy
and ruin. The intentions of the promisee are being carried out,
is
his desires are being realized, and the convenience
convenience of society
society is
being served
served by enabling the creditor to collect from the promisor.
While it was thought in Blymire v. Boistle
Boistle that it would be unjust
unjust
proinisor to throw him open to two suits on his promise,
to the promisor
one by the promisee
promisee and one by the creditor, after a century of
application of the rule in favor of the creditor no substantial
application
injustice to the promisor has appeared. He has not in fact been
been
procedure is
sued twice;
twice; and if he fears a second suit, modern procedure
everywhere elastic enough
enable him to join the other possible
everywhere
enough to enable"
is brought.
brought. 22313
that is
plaintiff as a party to the first action
action that
The Pennsylvania
Pennsylvania court has recognized
recognized that creditor
creditor beneficiaries have enforceable rights in several classes
classes of cases, these
"exceptions" to the general
classes frequently being said to be "exceptions"
v. Devenis, 99 Conn. 203,
2o3, 12r
Ad.
..' The court approved this view in Baurer v.
121 At!.
566 (1923).
(1923).
566
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THIRD PARTY
IN PENNSYLVANIA
PARTY BENEFICIARIES IN
PENNSYLVANIA
13
rule. But cases should cease to be referred
"exceptions" referred to as "exceptions"
when there is no good reason for distinguishing them and where
the cases so described
described cover substantially the whole field in which
the supposed general rule operates.2244 The classes
"excepclasses of such "exceptions"
tions" are: (I)
( I) assumptions of mortgage debts by grantees;
grantees; (2)
(2)
assumptions of a testator's
assumptions
testator's debts by a devisee; (3) assumptions
assumptions
of debts by the purchaser
purchaser of a business.
BENEFICIARIES
MORTGAGEE BENEFICIARIES
June I2,
x2, I878,25
1878,25 it was clear that where
Prior to the Act of June
a mortgagor sold land or chattels to a grantee
grantee who assumed
assumed payment of the debt, the mortgagee or pledgee could maintain an
26
action against
against the grantee to enforce
enforce the promise. 26
This is still
conveyances of mortgaged
the law with respect to conveyances
mortgaged chattels, the
Act of 1878
I878 applying
applying only in land cases
cases..227 That statute requires
an assumption of the mortgage debt by the grantee
grantee of the
mortgaged
mortgaged land to be in writing. Its purpose may have been
been
to prevent
prevent the courts from holding, as they had been doing,
Seaver v. Ransom, 224 N.
120
.. This is recognized
recognized by Pound, J., in Seaver
N. Y. 233, 120
(1i18).
N. E. 639 (1918).
2o5, §§ I, 2,
2, PA.
192o) §§ 18854, 18855.
18855.
Z P. L. 205,
PA. STAT.
STAT. (West
(West 1920)
grantees assumption of the mort"" Hoff's Appeal, 24 Pa. 2oo
200 (I855)
(1855) (The
(The grantee's
gage debt was held to make him a debtor of the mortgagee, who, the court
court
assumpsit) ; Lennig's Est,
said, could maintain
maintain assumpsit);
Est., 52
52 Pa. 135 (1866)
(1866) (same);
(same);
Merriman
9o Pa. 78 (1879)
mortgagee sustained).
sustained).
Merriman v. Moore, 90
(1879) (assumpsit by the mortgagee
"It
"It was nothing to Cochran's vendees
vendees what the former did with the purpurchase-money. He saw proper to apply a portion of it to the payment of the
mortgages which bound the land conveyed,
conveyed, although they imposed no personal
purchase-money shall be paid.
liability upon him. A vendor
vendor may direct how the purchase-money
He may reserve
reserve it to himself, donate it to a public charity, or may make such
other disposition of it as may best meet his views, and if his vendee
vendee agrees to
pay it according to such directions,
directions, he cannot set up as a defense
defense that his
vendor was under no duty to apply it in such manner. The difficulty in
the way
way of the defendants
defendants is, that the evidence rejected
rejected would go to show
show
that they have not paid the purchase-money.
purchase-money. The right of the plaintiff
plaintiff to
to
'It is a rudimental
recover does not depend upon privity of contract. 'It
rudimental principle,
consideration for his
that aa party
party may sue on a promise made on sufficient
sufficient consideration
use and benefit, though it be made to another
Merriman
another and not to himself.'"
himself.' " Merriman
(1879).
v. Moore, 90 Pa. 78, 81 (1879).
'The
supra note 25, "is expressly limited
limited to transac:n
The Act of June 12,
12, 1878, Sflpra
transactions arising on sales of real estate"
estate' and does not affect an assumption of a debt
debt
secured
by
a
mortgage
or
pledge
of personal
secured
mortgage
personal property. "If the parties so intend,
it will create
a
personal
encumbrance
create
liability by the grantee to the holder of the encumbrance
• . •. and if necessary
necessary recovery
recovery may be had in the name of the vendor to the
5oo, 503, 502, Il2
112 Atl. 80,
8o, 81
use of the encumbrancer." Gill's Est., 268 Pa. 500,
(192o)
(pledgee's claim against the grantee's
valid). This was
(1920)
(pledgee's
grantee's estate
estate held valid).
approved in Lowry v. Hensal, 281 Pa. 572, 127 Atl.
(1924).
At!. 219
219 (1924).
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UNIVERSITY
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PENNSYLVANIA LAW
UNIVERSITY OF
LAW REVIEW
REVIEW
that a grantee
grantee was personally bound
bound to pay the mortgage
mortgage debt,
when
"subject to"
when all that he had done was to buy the land "subject
28
the mortgage. 28
The statute provides
that
he
must
"by
an agreeprovides
ment in writing, have expressly assumed
assumed a personal
personal liability therefor."
for." There
There is the further provision, however, that "the right to
to
enforce
such
personal
liability
shall
not
enure
to
any
person
other
enforce
personal
other
than the person with whom
whom such an agreement is made, nor shall
such
such personal
personal liability continue
continue after the said grantee has bona
fide
fide parted with the encumbered
encumbered property, unless he shall have
expressly assumed such continuing liability."
appears in
in
expressly
liability." 29 This appears
form to deny the mortgagee
mortgagee any right to payment
payment by the mortsubsequent party, even though the
gagor's grantee, or by any subsequent
latter has expressly promised the mortgagor or his immediate
grantor to pay the mortgage debt. In
In spite of the statute, hownecessarily makes the promisor
ever, such an assumption contract necessarily
promisor
the principal
principal debtor and the promisee only a surety that the debt
debt
will be paid. 3P° This being so, justice
justice is best done and the social
convenience is best served by allowing the creditor, the mortgagee,
convenience
to enforce
enforce payment by the one upon whom ultimately the burden
2sIn Kirker v. Wylie, 207
2o7 Pa. 511,
lO74 (1904),
(19o4), the court
said:
"In
511, 512, 56 At.
Atl. 1074
court said:
"The
"The purpose of the act of 1878 was to relieve the grantee
grantee from an implied
implied
subject."'
'under and subject.'"
liability arising from the use of the words 'under
16o Pa. 191,
191, 28 Atl. 839 (1894),
(1894), it was held that
In Lennox v. Brower,
Brower, 160
the Act
mortgagor suing his grantee on the
Act of 1878 was not applicable
applicable against a mortgagor
latter's oral promise to pay the purchase price of the land, even
even though
though that
promise
promise was to pay the mortgage debt. Inasmuch as the promise of a grantee
grantee
debt is practically
practically always a promise to pay the agreed
to assume and pay the debt
price
price of the land, this decision
decision greatly
greatly narrows
narrows the application of the statute.
In May's Est., 218 Pa. 64, 67 At!.
Atl. 120 (1907),
(19o7), the words "under and
mortgage were held to be an implied
implied promise by the grantee
subject to" the mortgage
to indemnify the grantor against
against the mortgage
mortgage debt, just as had been held
prior to the Act of 1878. Very surprisingly, the court said, at 70,
7o, 67 At!.
At. at
at
122, that the act "does not affect the liability of the grantee to his grantor, but
only applies to the relations between the grantee
grantee and the holder of the incumincumbrance." But the decision was against the grantor on the ground that he showed
brance."
therefore entitled to no decree of indemnity
indemnity against the grantee.
no loss and was therefore
12, 1878,
""'Act
Act of June
June 12,
1878, supra
supra note 25. Kirker v. Wylie, 207
207 Pa. 511, 513,
513,
56 At!.
Atl. 1074
lO74 (1904),
(io4), held in a suit by the grantor (the promisee)
promisee) that an express
express
subsequent
agreement to pay the debt would bind the grantee even after his subsequent
conveyance,
conveyance, because "it was as much a continuing liability as an obligation to
discharged only by payment."
payment." But
pay aa fixed sum of money and it could be discharged
without any reference in this case, the court held in Sloan v. Klein, 230
230 Pa. 132,
At. 403 (1911),
without
(1911), that after
after the grantee
grantee has conveyed
conveyed to another, without
79 Atl.
mortgagee cannot mainthen assuming the continuing duty to pay the debt, the mortgagee
tain assumpsit
assumpsit against him.
219 (1924).
(1924).
"See
127 Atl. 219
3D
See Lowry v. Hensal, 281
281 Pa. 572, 12]
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PARTY BENEFICIARIES IN
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15
must fall. This is amply established by the almost universal
practice in other states
states to sustain an action by the mortgagee. In
In
spite of the express
express words of the statute, it seems that in Pennsylenforce the assumption contract
vania the mortgagee
mortgagee can enforce
contract if he
3
31
sues in the name of the promisee. 1 The troublesome
troublesome provision
in the statute
statute that compels this formality of procedure ought to be
repealed.
CONDITIONAL DEVISES
CONDITIONAL
Where a testator devises land on condition
condition that the devisee
devisee
shall pay money to a third person, it has been
been held that the acceptacceptance of the devise is by implication
implication a promise to pay the money on
32 The third person
which the third person can maintain action. 32
creditor beneficiary. The only strikmay be either a donee or a creditor
inter vivos
ing difference between such a devise and a conveyance
conveyance inter
vivos
acceptance by a devisee occurs after the
on the same terms is that acceptance
death of the one who in other
other cases would be the promisee.
promisee.
3o, at 577, 578, 127
127 Atl. at 22o,
'In
supra note 30,
31
In Lowry
Lowry v. Hensal, supra
220, 221, the
at
mortgagee because
court threw out a bill in equity by the mortgagee
because he had a remedy
remedy at
mortgagee "may proceed against the mortgagor, or directly
saying that the mortgagee
law, saying
debt
payment of the debt
grantee," and that the grantee
against the grantee,"
grantee "assumes the payment
and becomes
becomes personally
personally liable, that liability
liability can be enforced through an indeindependent action at law in the name of the grantor." See also Tritten's Est., 238
238
Pa. 555, 86 At.
Atl. 461 (1913).
(1913).
171 Pa. 328, 334, 33 Atl. 344, 346
In Blood v. Crew Levick Co., 171
346 (1895),
(1895), a
. .
. ..
grantee agreed to accept title "subject to the payment of the mortgages .
secured
but does not assume the payment
payment of the .. .
. .. notes given for the debts secured
by said mortgages." This was held to be a promise by the grantee
grantee to his
grantor
indemnify him by paying the mortgage
mortgage debt, and to make the
grantor to indemnify
grantor
grantor a surety
surety for the grantee as principal debtor. The court
court said also
at 334, 33 Atl. at 346:
346 : "We can see no reason why an action in the name of the
party entitled
covenantee
brought upon itit to the use of the party
covenantee might not have been brought
I1Z
to receive the money." This was repeated
repeated in Gill's Est., 268 Pa. 5o0,
500, 5o2,
502, lI2
(W2o).
Atl.
Atl. So, 81 (1920).
In an assumpsit
assumpsit against the mortgagor's
mortgagor's grantee, itit was
was held that the
grantor could maintain action on the assumption of the debt. Thomas
Thomas v.
(igoo). The court
Fourth St. M. E.
E. Ch.,
Ch., 24 Pa.
Pa. C. C. 642, 645 (1900).
court said that the
action of assumpsit might be "by
"by the grantor
grantor or in his name to the use of the
person entitled to the money .. .. .. in this case, the holder of the mortgage."
(1902), the mortgagee
mortgagee sued
In
In Fisler v. Reach, 2o2
202 Pa. 74, 51 Atl. 599 (1902),
sued
the grantee in the name
with his consent. Being called
name of the mortgagor and with
upon to show a warrant
warrant of attorney
attorney from the mortgagor, the mortgagee
whatever
could not do this because the mortgagor
mortgagor had meantime "parted
"parted with whatever
Ibid. 76, 51 Atl. at 599. For that reason the case
action." Ibid.
interest he had in the action."
was dismissed.
98
(885); Etter v. Greenawalt,
io8 Pa. 226 (ISS5);
'Dreer
32
Dreer v. Penna. Ins. Co.,
Co., 108
Greenawalt, g8
Hoover, 5 Pa. 351 (1847)
(1847)
(promise to pay legatee) ; Hoover v. Hoover,s
Pa. 422 (ISSI)
(1iS8)
Pa.422
(promise
("the
responsible.")
("the devisee became personally responsible.")
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UNIVERSITY OF
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ASSUMPTION OF DEBTS
ASSUMPTION
DEBTS BY PURCHASER
PURCHASER OF BUSINESS
BUSINESS
The case that has been most frequently litigated in Pennsylvania
purchaser
vania is one where a person
person sells his business assets to a purchaser
and the latter promises to assume and pay the debts of the seller.
There is no substantial
substantial difference in the facts, or in the policies
beneficiary
involved, between
between this case and that of a mortgagee beneficiary
or the specific case decided against the plaintiff in Blymire v.
Boistle. In those cases the consideration
consideration received
received by the prompromBoistle.
isor is the conveyance of land by the promisee. Land often forms
"assets" of a business; but even if it does not, no
part of the "assets"
reason is apparent
apparent for making a creditor's right depend upon the
3
consideration received by the promisor. 813
specific
Nor
specific kind of consideration
should any distinction be attempted
between
the
debt
due
to
the
attempted between
creditor
creditor of one
creditor in Blymire v. Boistle and the debts due the creditor
who is selling his business assets. In spite of Blymire v. Boistle,
the clear
creditors of one who
clear weight of authority now is that the creditors
sells his business assets can maintain suit against the purchaser
purchaser
if the latter promises
the
seller
to
pay
these
creditors~a
promises
seller
creditors. 1M4 A
At.
33 In the Greene County case, supra note 22,
22, the court said at 314,
314, 141 Atl.
"It may be the distinction between
between the consideration
consideration here involved that
that
at 31: "It
enables suit, and one where suit is denied is the augmentation
enables
augmentation of the promisor's
estate." But this is a distinction that the courts have never taken and one that
estate."
that
is out of harmony with the development
development of the law of consideration
consideration for promises. Benefit
Benefit to a promisor has never
never been necessary to make his promise bindbinding; and it should
should not now be used to separate one
one class of third party benebeneany distinction
ficiaries from another. Much less, of course, should there be any
between
between one kind of "augmentation"
"augmentation" and another-between
another-between land and other
other
kinds of business assets.
Commercial Bank v. Wood, 7 W.
S. 89
1844) (decided
(decided partly
310 Commercial Bank v. Wood, 7
W. &
& S.
89 (Pa.
(Pa. 1844)
on trust fund theory, but the promisee
promisee merely deposited a draft with the defendant who promised
promised to pay a debt due to the plaintiff); Bellas v. Fagely,
ig Pa.273
Pa. 273 (1852)
19
(1852) ; Townsend
Townsend v. Long, 77 Pa. 143 (1874);
(1874); Wynn
Wynn v. Wood, 97
Pa. 216 (1881); White v. Thielens,
(1884); Delp v. BartholoThielens, io6
106 Pa. 173 (1884);
Atl. 871 (1888)
may Brewing
Brewing Co., 123 Pa. 42, I5
IS At!.
(1888);; Sargent v. Johns, 2o6
206 Pa.
386, 55 AtI.
1051 (I9o3)
Atl. 1051
(1903);; Cox v. Phila. Pottery Co., 214 Pa. 373, 63 Atl. 749
(igo6)
(190o9) ; System
System Co. v. Ly(1906);; Howes
Howes v. Scott, 224 Pa. 7, 73 Aft.
Atl. 186
186 (1909);
(i9i);
coming Co., 46 Pa. Super. 499 (19II);
Kenyon Co. v. Sutton, 50 Pa. Super.
(1912); International
445 (1912);
International Harv. Co. v. Stoker, 34 Pa. C. C. 186
186 (19o7).
(1907).
In Wray v. Bowman, 74 Pa. Super. 479 (1920),
(i92o), an agent was given judgagentes commission. The
ment on the buyer's promise
promise to the seller to pay the agent's
price
certainly did not constitute
price of the land certainly
constitute assets belonging
belonging to the agent.
In Howes v. Scott, 224 Pa. 7, 73 Atl.
AUt. 186
interest
186 (igo9),
(1909), L conveyed
conveyed an interest
in land to the defendant
defendant and the latter promised
promised to pay a debt that L owed
owed the
plaintiff. It
It was held that the plaintiff could enforce the promise. This
This case
case is
exactly
exactly like Blymire v. Boistle and in direct conflict
conflict with it. Bruce v. Howley,
Super. 169
69 (1905)
(195o)
(exactly the
29 Pa.
Pa. Super,
(exactly
the same).
same).
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17
17
5
shorter line of cases, however, is directly in conflict with this. 335
Sometimes'aa halting effort has been made to reconcile
reconcile the deciSometimes'
sions; but usually the court was content to cite a few of those
that are in harmony
with. the decision then being rendered. The
harmony witQ
right of the creditor in these cases is usually recognized
recognized and
enforced on the "asset" theory so common in other
other states. The
defendant has received assets to which the plaintiff is said to have
some sort of "title."
"title." This theory was equally applicable
applicable in
difference being that the assets reBlymire v. Boistle,
Boistle, the only difference
ceived by the promisor
promisor consisted of land rather
rather than land, stock"asset" theory is merely one of the
in-trade, and goodwill.
goodwill. This "asset"
various methods taken by many courts to escape from the doctrine
doctrine
appearing
that third parties cannot enforce a contract, without appearing
to deny the validity of the doctrine. Of course, if the assets
transferred, whether
whether they consist of land or chattels or choses in
in
which
action, are accepted
accepted by the transferee
transferee as a trust fund out of which
he undertakes
undertakes to pay the claims
claims of creditors, the creditors are
beneficiaries
beneficiaries of a trust and have the rights and remedies
remedies both in
in
equity
equity and at law that are customarily
customarily available
available to a cestui que
trust. The transferee
out of his
trust.
transferee is not a debtor, bound to pay
payout
own pocket; he is a trustee who owes merely the duty of faithful
In that fund, the creditors
administration of the fund. In
creditors may be
"title" or "property."
"property." Of course, many such
said to have some "title"
36
cases can be found in every state. 36
But in the cases now under
under
After the defendant has promised to pay certain
creditors of the promisee,
certain creditors
he cannot be successfully garnisheed
to
garnisheed by another
another creditor
creditor of the promisee as to
the amount promised. Vincent
(I851).
Vincent v. Watson,
Watson, 18 Pa. 96 (1851).
"Ramsdale v. Horton, 3 Pa. 330 (1846); Torrens v. Campbell,
Campbell, 74 Pa.
"Ramsdale
470
(1877); Adams v. Kuehn, 119
II9
470 (1873);
(1873); Kountz v. Holthouse, 85 Pa. 235 (1877);
Pa. 76, 13 Atl.
Atl. 184 (1888);
(1888); Freeman
Freeman v. Penna. R.
R. R., 173 Pa. 274, 33 Atl.
1034 (1896);
'99 Pa. 239, 48 Atl. 968 (1901);
(I9OI);
1034
(18g6); Crown Slate Co. v. Allen,
Allen, 199
Sweeney
go At.
Sweeney v. Houston, 243 Pa. 542, 90
Atl. 347 (914).
(1914). The last five are
cases
consideration
cases where the defendant
defendant assumed the debt of another for a consideration
reconbeneficial to the defendant moving from the debtor. They can not be reconciled with the cases in the preceding
preceding note. It
It should be remembered
remembered that
that
generally
acknowledged in the opinions. The late case of Brill
generally no conflict
conflict is aclmowledged
1-_7 Atl.
At. 840
84o (1925),
v. Brill, 282 Pa. 276, 127
(1925), is an exception.
exception.
"The
•• The following are cases
cases where the defendant in fact held property
in trust for a plaintiff:
v. Holdship, 22 Watts 104 (Pa. 1833); Beers v.
plaintiff: Hind v.
Robinson, 9 Pa. 229
(1848) ; Justice v.
v. Tallman, 86 Pa. 147 (1878);
(1878); Hostetter
Hostetter
229 (1848);
v. Hollinger, 117 Pa. 606,
6o6, 12
(1888); McAvoy
12 Atl. 741 (1888);
McAvoy v. Com. Title Co., 27
Pa. Super. 271 (1905).
(905).
Sparks v. Hurley, 208
2o8 Pa. 166,
66, 57 Atl.
At. 364 (1904),
(1904),
was a gift of shares of stock, the defendant
defendant promising to hold them for the
benefit of the plaintiff.
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UNIVERSITY
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UNIVERSITY OF
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consideration
consideration there was no trust fund. The "assets"
"assets" that are
transferred
transferred belong to the transferee to do with as he pleases.w
pleases. 3Ii
He owes no one a duty to conserve
conserve and distribute those "assets,"
and his duty to pay is not limited to their amount. No
one but
Noone
them.
"title" to them.3,S
It is very incompetent reasonhimself has any "title"
ing to say that the plaintiff has a "title"
"title" when there is no res,
res, and
all that the court does is to enforce
enforce aa promise. If
If the plaintiff's
plaintiff's
"title" consists of nothing
nothing but his right against
against the defendant as
a promisor, it is a beautiful argument in a circle to say that he has
such a right because he has a title. The property
property and assets conconsideration for his promveyed to the promisor are merely the consideration
ise; they are not to be administered
administered by him as a trust fund; and
39
the defendant is a debtor, not a trustee. 39
The majority cases
should be followed, but without using any "asset" or "trust fund"
theory and without any attempt to distinguish the minority
minority cases
cases
or Blymire v. Boistle.
It is sometimes vaguely intimated
It It
intimated that it would be a fraud on creditors
for the defendant to take the assets
assets and not pay the debts. But
But such fraud
has to be proved before
it
can
be assumed to exist; and in the cases
before
cases here
dealt with such a fraud is neither alleged nor proved. If
such
a fraud has
If
been perpetrated, the remedy
recover the assets
assets and to apply
remedy is a bill to recover
them properly. .-The
The actual relief given in
in the present cases is the enforcement of the defendant's
defendant's express promise.
,3
This was
was specifically
specifically recognized
recognized in
Townsend v.
Long, 77
77 Pa. 143 (1874);
(1874);
"This
in Townsend
v. Long,
v. Bartholomay
Bartholomay Brewing
Pa. 42, 15
Atl. 871
(1888) ; and Greene
Delp v.
Brewing Co., 123 Pa.42,
IS At!.
871 (1888);
At. 27 (1927).
(1927). Hind v. HoldCounty v. Southern Sur. Co., 292 Pa. 304, 141 At!.
ship, 2 Watts 104
lO4 (Pa. 1833),
1833), was the same in effect, the court
court holding that
consideration given by the promisee was not material.
the amount of the consideration
'In
11 Pa. 76, 85, 13 Atl. 184, 186
I86 (1888),
39
In Adams v. Kuehn, II9
(1888), the court said:
said:
"Also where
tradesman and undertakes
undertakes to take
where one buys out the stock of a tradesman
the place, fill the contracts,
and
pay
the
debts
of
his
vendor.
These
cases
cases
contracts,
as well as the case of one who receives
receives money or property on the promise
promise
to payor
pay or deliver to a third
person,
are
cases
in
which
the
third
person,
although
third person,
which
although
not a party to the contract, may be fairly said to be a party to the consideration
on
which
it
rests.
In
good
conscience
the
title
to
the
money
or
it
conscience
or
sideration
thing which
which is the consideration
consideration of the promise passes to the beneficiary,
and the promisor is turned in effect
trustee." It
It is mere fiction
fictiou to
effect into aa trustee."
say that the third person "may fairly be said to be a party to the considconsideration." He gave not an iota of it. What the court means
means is that the
plaintiff ought to get the money promised by the defendant. To say that
"the title to the money .
. .. .
. passes to the beneficiary"
beneficiary" means merely
that the court intends that he shall be
be paid the money. To say
say that the
promisor is "in
for .the
the "effect!'
"effect" is quite otherwise.
"in effect a trustee" is untrue; for.
No accounting
accounting is required of the defendant
defendant and he would not be discharged
effect a
by making one and showing
showing that the assets are not sufficient. "In effect
trustee" means merely
merely "the defendant
defendant is bound by his promise and the plainSargent
repeated in Sargent
tiff has a right as beneficiary thereof." This reasoning is repeated
v.
2o6 Pa. 386, 55 Atl. 1051
1051 (1903);
(19o3) ; Bruce v. Howley,
v. Johns, 206
Howley, n9
29 Pa. Super.
169 (19o5).
(1905) ..,
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IN PENNSYLVANIA
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i9
19
CONTRACTORS' SURETY
BONDS
CONTRACTORS'
SURETY BONDS
There is another class of cases that is worth separate
considseparate considincreasingly numerous. These
eration, a class that is growing increasingly
are cases involving the surety bond of a contractor
contractor in which the
materialmen, who
surety promises the owner
owner to pay laborers and materialmen,
become the creditors of the general contractor. These bonds are
commonly exacted
exacted for the protection of the owner, the promisee,
whether this owner is a private
private party or a municipal corporation.
An additional purpose, however, is frequently
frequently to protect the
laborers and materialmen.
materialmen. In some surety bond cases this fact
recognized, was not given legal operawas not recognized,
recognized, or if recognized,
40
tion, and the third parties were denied a remedy on the bond. 40
To remedy this defect in the administration
administration of justice, city ordinances and statutes were passed, the purpose of which was to
to
give a remedy to laborers and materialmen against the sureties
sureties
on the bond in the case of public contracts.
contracts. It
It is now well estabstatutory bond, or the statute under which the bond
bond
lished that if a statutory
is executed, clearly
states
that
it
is
made
for
the
benefit
of
the
clearly
third parties, as well as the promisee, the third parties can
can maintain an action upon the bond.4411 There is a state statute, which
which
in form follows an earlier city ordinance, giving cities the
power to require
contractor to give "an additional
require a contractor
additional bond"
bond" and
providing
materialmen shall have an enforceenforceproviding that laborers
laborers and materialmen
able right on such bonds.4422 The cities are not required to exercise this power, however, and the fact that "an additional bond"
bond"
is not executed does not show that the third parties
parties are intended
County v.
Southern Sur.
Pa. 304,
304, 141
141 At. 27 (1927);
'0"Greene
Greene County
v. Southern
Sur. Co.,
Co., 292
292 Pa.
At!. 27 (1927);
Board of Ed. v. Mass. Bonding & Ins. Co., 252
(1916);
252 Pa. 5o5,
505, 97 Atl. 688 (1916);
First M. E. Ch. v. Isenberg, 246 Pa. 221,
92
At.
141
(1914).
221,
At!. 141 (1914) .
112 Atl.
(192D);
..'Robertson
Robertson Co. v. Globe Indem. Co.,
Co.• 268 Pa. 309,
309, II2
At!. 50 (1920);
(1916); Phila. v. Wiggins,
Com. v. National
National Sur. Co., 253 Pa. 5, 97 Atl.
At!. 1034 (1916);
At. 31 (1910);
(igio) ; Phila. v. Nichols Co.,
227 Pa. 343, 76 At!.
Co., 214 Pa. 265, 63 At.
At!. 886
6o Atl.
(i9o5); Phila. v. Neill,
(i9o6);
211 Pa. 353, 60
(1906); Phila. v. Neill, 2II
At!. 1O33
1033 (1905);
Neill,
2o6 Pa. 333,
333, 55 At!.
AUt. 1032
(1903); Phila. v. McLinden, 205 Pa. 172, 54 At!.
Atl.
206
1032 (1903);
io56 (1900),
(igoo), 198
719 (1903);
(1903) ; Phila. v. Stewart, 195
195 Pa. 309, 45 Atl. 1056
19B Pa. 422,
suits) ; Robertson Co. v.
At. 275 (1901)
(19Ol) (creditors can maintain separate
48 At!.
separate suits);
(1921); Bowditch
Globe Indem. Co., 77 Pa. Super. 422 (1921);
Bowditch v. Gourley, 24 Pa.
(9o4). .
Super. 342 (1904)
i8, §§ I, 2, PA. STAT. (West
1920)
IO, 1917, P.
P. L.
L. 158,
..I Act of May 10,
(West 1920)
15854, 15855.
15855.
§§ 15854,
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UNIVERSITY OF
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LAW REVIEW
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as beneficiaries
beneficiaries of the one bond given for the protection
protection of the
43
4
promisee. &
There are several additional
additional cases, not falling in any of the
classes discussed above, in which a creditor beneficiary has been
been
44 When all
enforceable right on the contract. 44
When
held to have an enforceable
the cases, taken together, are considered,
considered, the result is that crednecesitors as well as donees have enforceable
enforceable rights. It is not necesbeneficiary should have given or be in any way consary that the beneficiary
nected with the "consideration"
"consideration" for the promise. There need be
"assets" or property
property in the hands of the promisor to which the
no "assets"
third party has any "title,"
"title," legal or equitable, real or imaginary.
in
It must merely appear that the contracting parties expressed in
some way an intention that the contract
should
be
for
the
benefit
contract
benefit
contemplated a performance
of the third party
party or that they contemplated
performance that
would satisfy an obligation
obligation owed by the promisee
promisee to the third
party. Others who will be incidentally
incidentally benefited
benefited have no rights
on the contract. 45
45
The difficult line to draw
draw is that between
between the
"Erie v.
Diefendorf, 278
278 Pa.
Pa. 31,
31, 122
i22 At. 159 (1923).
'"Erie
v. Diefendorf,
Atl. 159 (1923).
Ati. g6I
96i (IBgg),
(1899), 203 Pa. 640,
In Lancaster
Lancaster v. Frescoln, 192
192 Pa. 452, 43 Atl.
AtI. 5o8
(i9O2), the suit was by the city (promisee)
(promisee) for the use of material53 Atl.
SoB (1902),
contractor bad
had
between the city
city and the contractor
men. In a previous suit the issues between
been litigated, but this should not affect
affect the rights
rights of the "use
"use plaintiff."
plaintiff."
The bond was held not to be for the benefit of materialmen. Some basis for
"an
this lay in the fact that a general ordinance required contractors to give "an
additional bond" for the benefit of third persons; and this was not such a
It provided
provided for the payment
payment of materialmen, but it did not specify
bond. It
that it
it was a bond given for their use.
In an article
YALE LAw
JOURNAL, the writer will
article to be published in the YALE
LAW JOURNAL,
materialmen should
ordinary
should be treated
treated as ordinary
attempt to show that laborers and materialmen
creditor beneficiaries,
beneficiaries, that this is generally recognized by Congress and the
state legislatures,
legislatures, and that they are so treated by the great majority of the courts
throughout the country
country even in the absence of statutes.
" Ayers' Appeal, 28 Pa. 179 (1857)
(promise of a creditor
«Ayers'
(1857) (promise
creditor to his debtor not
not
v. Brill,
creditor had made
made his levy) ; Brill v.
to levy execution
execution until after another creditor
282
282 Pa. 276, 127 At.
Atl. 84o
840 (1925)
(1925) (a sealed
sealed bond by a father to the mother of
his illegitimate
sthtute to support, to
to
illegitimate child, whom the mother was bound by statute
support ) ; Pittsb. Carbon Co. v. Phila. Co., 130
pay money for the child's suppor.)
130 Pa.
438, 18 At.
company
438,
Atl. 732 (1889)
(188g) (the
(the defendant assumed
assumed the duty of another
another company
to supply gas
plaintiff).
gas to the plaintiff).
'"Klingler
Klingler v.
I, iog
At. 542 (192o),
v. Wick, 266
266 Pa. I,
log At!.
(1920), is a good
good example of a
mere
landowner's promise to a neighbor
neighbor to let him
mere incidental beneficiary; a landowner's
use a switch on his land was
was held not to be for the benefit
benefit of the railroad
company. In Guthrie v. Kerr, 85 Pa. 303 (1877),
(1877), the plaintiff
merely
plaintiff was merely
beneficiary of a power
power given to the defendent, the latter having made no
the beneficiary
promise
promise to pay the plaintiff.
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THIRD PARTY
PARTY BENEFICIARIES
BENEFICIARIES IN
IN PENNSYLVANIA
PENNSYLVANIA
THIRD
21
intended and the incidental beneficiaries, a difficulty that does not
ordinarily arise in the case of creditors.
A hundred years ago the presence of a "seal"
"seal" on the written
contract would prevent a third party beneficiary from having a
remedy. 46 This seems rightly to have been forgotten for a
remedy.46
4
T but in a recent case it was revived as a make-weight
period;
make-weight for
period;47
48
grounds. 48
other grounds.
on other
reached on
had reached
a decision that the court had
The time is fully ripe for the Pennsylvania court to say regularly and systematically, as well as to decide, that a creditor gets
enforceable right when other parties contract to pay him what
an enforceable
may be due, even though benefit to the creditor is merely a desired
intermediate
intermediate object of the promisee. Such benefit need not be his
recognition of
ultimate motive or object of desire. An express recognition
the fact that numerous cases are in conflict with the decision in
in
Boistle and a definite disapproval
Blymire v. Boistle
disapproval of that decision will
considerably
considerably simplify the problem of the lawyer and the trial
judge. It is certainly disapproved
disapproved by the American Law Institute. Sufficient
tute.
Sufficient difficulty will be left, however, for there will still
"incidental" beneficiaries
beneficiaries with no rights. Under the generally
be "incidental"
persons
existing law today, the problem is not whether or not two persons
contract create rights in a beneficiary. It is perfectly clear
clear
can by contract
that they can. Instead, the question is where to draw the line
between beneficiaries
between
beneficiaries with rights and third parties to whom perbeneficial but who have no rights.
formance may be incidentally beneficial
This must be determined by the usual processes of interpretation.
interpretation.
If
If the terms of the contract provide, either expressly
expressly or impliedly,
that a third party shall have a right to the promised performance,
the courts should give effect to the provision. If it appears that
that
the promisee
promisee contracted
contracted for the promised
promised performance
performance as a donation to the third party, that party .has
enforceable right. And
JIas an enforceable
Strohecker v. Grant, 16
i6 S. &
L 237 (Pa. 1827)
1827) ; Uhland v. UJhland,
i7
.. Strohecker
& R.
Uhland, 17
S.
S. & R. 265
265 (Pa. 1828)
1828);; DeBolle
DeBolle v. Penna. Ins. Co., 4 Whart. 67,
67, 74 (Pa.
(Pa.
1837).
1837).
7
go
Brill v. Brill,
47Brill
Brill, 282 Pa. 276, 127
127 AUt.
Atl. 840
840 (1925).
(1925). Shermet
Shermet v. Embick, 90
decides the other way, distinguishing
Pa.
Pa. Super. 269
269 (1926),
(1926), deciqes
distin~uishin!S Brill v. Brill
Brill bebeinstrument.
cause in that case the beneficiary
benefiCIary was named
named as
as such in
m the mstrument.
141 AUt.
..
Southern Sur. Co., 292 Pa. 3o4,
304, 141
Atl. 27 (1927).
(1927).
, Greene County v. Southern
HeinOnline -- 77 U. Pa. L. Rev. 21 1928-1929
22
UNIVERSITY OF
OF PENNSYLVANIA
PENNSYLVANIA LAW
UNIVERSITY
LAW REVIEW
REVIEW
performance will disif the contract
contract is so made that the promised
promised performance
charge
a
duty
of
the
promisee
to
a
third
party,
that party
can
charge
party can
directly enforce
procedure will attain the
enforce the contract, since this procedure
objects
objects for which the contract was made
made at the least expense to
the promisee and to society. In
In actions by the beneficiary there
should be full realization that the promisee
promisee can easily be joined as
concerned fears that otherwise
a party
party if any of the parties concerned
otherwise his
interests will not receive
receive adequate protection.4499
,"
•• The Pennsylvania
Pennsylvania decisions
decisions are reviewed
reviewed in (928)
(1928) 76 U. OF P.
P A. L. REv.
594.
594·
HeinOnline -- 77 U. Pa. L. Rev. 22 1928-1929